Downers

The Buzz

"Economic consulting"

"Privately owned is a big plus"

"Sharp, but small."

"Limited strategy work"

About Analysis Group, Inc.

Boston-based Analysis Group provides expertise in economics,
finance, health care analytics, and strategy to top law firms,
Fortune 500 companies, global health care corporations, and
government agencies. Much of the firm's work is grounded in
economic analysis - whether that involves a quantitative assessment
related to litigation, quantifying the impact of a disease on the
U.S. economy, or developing a model for a client's corporate
strategic planning exercise.

Analysis Group has provided litigation support for lawyers at
more than 500 global law firms, and has consulted to general
counsels and senior executives at a number of Fortune 100
companies. The firm also has a robust health care practice.

For law firms, Analysis Group's consultants help with pretrial
discovery, development of economic and financial models,
preparation of testimony, critique of opposing experts' analyses,
and provision of expert testimony. The recent economic crisis
resulted in an uptick in engagements requiring the analysis of
complex securities - such as derivatives and credit default swaps,
or the securitized assets at the center of the subprime housing
fallout - both for litigation and for a wide range of participants
in financial markets. The firm also works on interesting and
unusual cases, such as the "Deflategate" controversy.

Corporate and government clients call on the firm for help with
a variety of business issues, including company and asset
valuations, cost-effectiveness analyses, market and competition
analyses, intellectual property matters, and tax issues. The firm's
large and growing health care practice integrates outcomes
research, epidemiology, drug safety studies, and pricing and
product strategy, as well as litigation support.

Close to - but not inside - the ivory tower

Former Arthur D. Little consultants Bruce Stangle and Michael
Koehn founded Analysis Group in 1981 in Belmont, MA. The two Ph.D.
economists sought to fuse academic practice with business
litigation consulting by applying economic research to distill
complex situations into narratives with powerful effect when
introduced at trials. Their goal was to create a uniquely
collaborative environment. For each client engagement, Analysis
Group's professionals are grouped into teams, which are tailored
according to the needs of the project and the client. Often, these
teams are supplemented by academic or industry experts from the
firm's external network.

At the beginning, the firm primarily consulted on mergers and
acquisitions. Today, its consultants - working from 14 offices
across the globe - have experience in all areas of economics as it
applies to the legal and business world. This includes securities,
health care, energy, intellectual property, antitrust, and
commercial litigation and damages.

Principled professionals

The firm adheres to four operating tenets, which give shape to a
kind of business philosophy. The first is access: Analysis Group
maintains close ties to specialists - top minds in academia,
leaders in their respective industries, and government insiders -
to ensure that clients have access to the best people and ideas.
Consultants work closely with a network of such experts to offer
clients quantitative analysis and hands-on experience to help
overcome business and legal hurdles. The second is collaboration:
The firm encourages strong relationships within consulting teams
and between teams and clients - which ultimately improves
communication, effectiveness, and satisfaction. The third is
responsiveness: The firm is able to rapidly identify specialized
experts for a case, and employs a flexible structure that allows
teams to quickly scale up or down as needed. The final tenet is
pragmatism: Analysis Group believes all strategies should focus on
relevant, applicable solutions in the business or legal world.

IN THE NEWS

August 2018

Analysis Group Client Republic of Cyprus Secures
Favorable Ruling in International Arbitration

A panel of the International Centre for Settlement of Investment
Disputes (ICSID) dismissed a €1.05 billion claim against the
Republic of Cyprus lodged by a Greek investment company and other
former shareholders in a Cypriot bank. The Cypriot government
acquired majority ownership in the Cyprus Popular Bank in a €1.8
billion recapitalization in 2012, amid fears of default due in part
to exposure to Greek bonds during that country's debt crisis. The
bank was placed in administration the following year, and deposits
of over €100,000 were made subject to a levy as part of a rescue
agreement between Cyprus and the European Commission, the European
Central Bank, and the International Monetary Fund.

The investment company Marfin Investment Group and other former
shareholders brought an ICSID arbitration claim under a 1992
bilateral investment treaty (BIT) between Greece and Cyprus. The
claimants challenged Cyprus's regulation of the bank, including the
Central Bank of Cyprus's decision to remove management and the
terms of the 2012 recapitalization. Skadden Arps, counsel for the
Republic of Cyprus, retained Analysis Group affiliates Jean-Pierre
Landau and Andrew Metrick, who in turn were supported by an
Analysis Group team led by Vice President Steven Saeger and
including Manager Andrew Ungerer. Professors Landau and Metrick
filed joint expert reports and provided testimony that addressed
the reasonableness of the actions taken by the Cypriot authorities
in the context of the European debt crisis.

An ICSID panel rejected the shareholders' claims, holding that
Cyprus had not breached any international obligations under the
BIT. The panel also awarded the Cypriot government €5 million in
legal costs.

August 2018

City of Milwaukee Settles Stop-and-Frisk Lawsuit in
Which Analysis Group Collaborated with the ACLU

In Milwaukee, as in a number of other American cities, black and
Latino residents have raised concerns that they are
disproportionately stopped and frisked by police, without
reasonable suspicion as required by law. These complaints led in
2017 to Collins, et al. v. City of Milwaukee, et al., a
lawsuit filed by the ACLU challenging the city's stop-and-frisk
program on the grounds that it violated residents' rights under the
Fourth and Fourteenth Amendments to the U.S. Constitution.

Among the evidence the ACLU submitted to the federal court in
the suit were expert reports by Analysis Group affiliate David
Abrams and criminal justice consultant Margo Frasier. An Analysis
Group team including Vice President Shannon Seitz and Associates
Rebecca Scott and Nick Vigil worked with the ACLU and Covington
& Burling LLP, and supported both Professor Abrams and Ms.
Frasier. Professor Abrams's report concluded that, even after
controlling for factors other than race and ethnicity, black people
in Milwaukee are significantly more likely to be subjected to
traffic and pedestrian stops and searched after being subjected to
a traffic stop, even though it is highly unlikely that these stops
and searches will result in the discovery of drugs or weapons. Ms.
Frasier's study concluded that, in a majority of documented traffic
and pedestrian stops, officers had failed to identify
individualized, objective, and articulable reasonable suspicion of
criminal activity or vehicle equipment violations prior to
conducting the stop. Her report also concluded that Milwaukee
police officers routinely failed to document race and ethnicity
information about people subjected to such stops.

The case was settled after a year and a half of litigation. As
part of the settlement, reforms were instituted that are intended
to overhaul how Milwaukee police conduct, document, supervise, and
monitor stops and frisks in the future.

Stockholders who opposed the purchase price of $55.85 per share
sought a court appraisal, claiming that the fair value of their
shares was $84.65 per share. On behalf of Solera and supported by
an Analysis Group team - including Managing Principal Bruce F.
Deal, Vice President Michael Cliff, and Manager Andrew Clarke -
Professor Hubbard appraised the shares of common stock. He
testified at trial that the deal price, adjusted for synergies, of
$53.95 provided the most reliable evidence of fair value. This was
corroborated by a nearly identical valuation from a discounted cash
flow (DCF) analysis that properly accounted for the investment
needed to support growth in the terminal period.

After considering nearly 1,000 trial exhibits, including 14
deposition transcripts and the live testimony of four fact
witnesses and three expert witnesses, Chancellor Bouchard ruled
that he "independently has come to the same conclusion" as
"respondent and its highly credentialed expert" that the
"market-generated Merger price, adjusted for synergies" is the
"best evidence of Solera's value" as of the date the merger. While
the Solera ruling is a continuation of the string of cases using
deal price as the anchor point for fair value, it is perhaps the
first to subtract synergies in a private equity transaction.

June 2018

White Paper on Vehicle Efficiency Standards Released by
Analysis Group Energy Experts

First enacted in 1975, the U.S. government's Corporate Average
Fuel Economy (CAFE) standards have promoted cost-effective energy
conservation by mandating that fleets of cars produced by vehicle
manufacturers each year in the U.S. meet certain minimum
fuel-economy requirements. Since 2017, however, the National
Highway Traffic Safety Administration (NHTSA) and U.S.
Environmental Protection Agency (EPA) have been reconsidering the
CAFE standards for the model years 2022-2025, which were originally
set in 2009.

An Analysis Group team led by Senior Advisor Susan Tierney and
Principal Paul Hibbard developed a white paper addressing one of
the factors likely to be part of the reassessment of CAFE standards
- namely, estimates of how consumers change their driving patterns
(i.e., driving more or fewer miles) when presented with cars and
light trucks that get a greater (or lower) number of miles per
gallon of fuel. This is known as the "rebound effect," and it is a
critical element in cost/benefit estimations of changes to vehicle
efficiency standards.

In the white paper Vehicle Fuel-Economy and Air-Pollution
Standards: A Literature Review of the Rebound Effect, Dr.
Tierney, Mr. Hibbard, and their Analysis Group coauthors reviewed
the extensive literature on the rebound effect and concluded that
studies using data from broad parts of the U.S. and based on
multiple years of data (e.g., time-series data) were most relevant
to determining the rebound effect. Those analyses, the authors
found, show that the rebound effect has been lessening over time as
baseline fuel economy has improved. The studies also suggest that
the rebound effect tends to decrease as income increases, because
the cost of fuel becomes relatively less important to decisions
about whether to drive or not; and that a consumer's vehicle miles
traveled is less sensitive to changes in fuel economy than to
changes in fuel prices. As a result, the authors determined that a
10-percent rebound effect, which up to now has been used by the
different agencies to establish CAFE standards, was supported by
the relevant literature.

May 2018

Analysis Group Works with Foundation Medicine to Obtain
National Coverage Determination for Groundbreaking Comprehensive
Genomic Profiling Assay for All Solid Tumors

On March 16, 2018, the Centers for Medicare & Medicaid
Services (CMS) took a major step forward in enabling precision
medicine for the treatment of patients with cancer. Specifically,
CMS issued a final National Coverage Determination (NCD) that
allows patients to receive U.S. Food and Drug Administration
(FDA)-approved next-generation sequencing (NGS) tests for any
recurrent, relapsed, refractory, metastatic, or advanced stages III
or IV cancer. NGS tests can be used to sequence the DNA from tumor
tissue, allowing care providers to test for a large number of
genomic alterations that are implicated in cancer cell biology.
Collectively, the results can help physicians make more informed
and individualized decisions about a patient's treatment regimen,
which can lead to improved treatment response rates and survival.
Following the NCD, all Medicare-eligible patients who are diagnosed
with advanced solid tumor cancer in the U.S. each year may become
eligible for tumor sequencing using NGS.

Among the tests approved for coverage was FoundationOne CDx™,
the first comprehensive genomic profiling assay reviewed
simultaneously by the CMS and FDA for solid tumors through a
parallel process. Developed by Foundation Medicine, the 324-gene
panel test can detect genomic alterations across all solid tumor
types, including alterations associated with over 15
already-approved targeted cancer drugs, as well as genomic
signatures including microsatellite instability (MSI) and tumor
mutational burden (TMB).

An Analysis Group team, led by Managing Principal Anita Chawla
and Manager Marcia Reinhart, supported Foundation Medicine's NCD
request with a comprehensive review and synthesis of medical and
scientific information on advanced cancer and settings in which
FoundationOne CDx is expected to be used, the analytic and clinical
validity of the test, and the clinical utility of NGS-based
testing.